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Bitcoin Falls as U.S. Judge Indicates U.S. Securities Law Covers Crypto

Investing.com - Bitcoin was a touch lower on Wednesday, as Ethereum continued to plummet amid news that a fraud case in the U.S. involving cryptocurrency offerings could proceed.

Bitcoin inched down 0.30% to $6,257.90 on the Bitfinex exchange, as of 8:52 AM ET (12:52 GMT).

Cryptocurrencies overall were lower, with the coin market cap of total market capitalization at $187 billion at the time of writing, compared to $195 billion on Tuesday.

ETH/USD, or Ether, the second-biggest alternative currency by market cap, slumped 10.67% to $171.64, not far from a fresh one-year low of $169.44. XRP, the third-largest virtual currency, decreased 1.49% to $0.25801 and Litecoin was at $48.421, down 10.39%.

On Tuesday, a New York federal judge ruled that a case could proceed using U.S. securities law to prosecute fraud cases involving cryptocurrency offerings. It’s the first case in the U.S. to address fraud cases over crypto offerings.

The ruling by U.S. District Judge Raymond Dearie means that a case against Brooklyn resident Maksim Zaslavskiy can continue. Zaslavskiy allegedly defrauded investors in two cryptocurrencies reportedly backed by real estate and diamonds.

In other news, some of the biggest virtual currency exchanges in the U.S., including Coinbase and Circle, have founded the first blockchain lobbying group in Washington. The Blockchain Association aims to promote the technology behind bitcoin and influence policy makers on technology and regulatory issues impacting digital currency companies, according to the Washington Post.

The association wants to address issues such as how digital coins are treated under U.S. tax law and explain how anti-money-laundering and know-your-customer regulations apply to the industry.

As cryptocurrencies have gained popularity but remained volatile, regulators around the world have struggled with how to oversee digital currencies, with exchanges facing increased scrutiny in the past year.